Question

What are THREE examples of monetary policy in the United States?

Group of answer choices

The government decreases government spending.

The government increases the discount rate.

The government reduces personal income tax rates.

The government begins a large public works project.

The government sells a large number of government bonds.

The government raises reserve requirements for banks.

Answer 1

1. The government increases the discount rate.
2. The government sells a large number of government bonds.
3. The government raises reserve requirements for banks.

Step-by-step explanation:

Monetary policy refers to the central bank actions of managing the money supply and interest rate. The central bank implements monetary policies through the Fed. The objectives of monetary policies are the maintain stable prices and to influence maximum sustainable economic growth.

Monetary policies are classified into contractionary and expansionary. Contractionary policies aim at controlling inflation. Expansionary policies are used to stimulate a high growth rate. Some of the monetary tools available for use by The Fed include the fed fund rate, the discount rate, and open market operations.